Illicit Networks: An Overview
By Pardis Mahdavi, Google Ideas Fellow, Pomona College, with thanks to Jay Chittooran, Council on Foreign Relations
Mexican marines escort Zurita Herrera, a financial operator for the Zetas drug gang in Veracruz (Handout/Reuters).
Illicit networks, by definition, are covert, illegal, and can sometimes use force, fraud or coercion. They cover a lot of ground; illicit networks include trafficking (drug, arms, and human), organized crime, terrorism, organ harvesting, and many other areas throughout the informal economy. These networks appeal to wide swaths of people because they are less cumbersome, generate better work opportunities and create more profitable ways to make money. In efforts to combat them, many countries, unilaterally and multilaterally, have enacted laws proscribing their activities, ironically creating new areas for these networks to exploit. This short memo will provide a brief background on elements of this cat and mouse game, a discussion of legal considerations, and an exploration of the role of technology in these illicit networks.
Background: definitions of salient terms, draw of illicit networks, and supply chains
What are illicit networks and what is their appeal? The terms illicit and licit are incredibly broad and are often interconnected or operate on a continuum. Illicit networks can refer to areas ranging from arms trafficking to organ harvesting to informal or counterfeit exchange of goods or currency. The limits of each term are not clear, and there are no universally established or accepted definitions. Rather, each state defines its own laws, which are themselves socially constructed—and malleable, creating a lot of grey areas in what many suppose to be black and white.
Consider for example, a young babysitter who is paid under the table and is therefore part of the illicit economy. Are her activities criminal and worthy of punishment? The same question is raised for the nanny who migrated from the Philippines to Dubai, perhaps without proper work papers, but is employed as a domestic worker, or the domestic worker in Rome who also has a side job in the sex industry. Where does the licit end and the illicit begin? Often terms like illicit (and informal and illegal, both of which are used interchangeably) are loaded and suggest something criminal. The greater the perceived level of deviancy, the higher state level of scrutiny comes into play, effectively criminalizing those who are trying to make ends meet.
Even then, however, the state can get it wrong. In the case of human trafficking, despite increased attention and greater understanding of the attendant issues at play, scholars have argued that the United Nations’ definition for human trafficking is far too broad, but its operationalization is focused too exclusively on sex workers and seen too narrowly through a prism of criminality. A human rights perspective, they argue, would better inform public policy decisions. The term human trafficking in popular conversations is like a rubber band. It stretches wide enough to encompass all sex workers (whether forced, defrauded, or coerced or not), but then shrinks to exclude those outside the sex industry such as forced laborers in garment and fishing industries. Across the board, however, trafficking is conceptualized within a criminalization framework.
The sheer draw of illicit networks for individuals, groups, and some states cannot be ignored. By virtue of operating without reference to law—especially tax law—these networks are perceived by those who use them to be more efficient and much more lucrative. They can create work opportunities where there are none in the formal economy, especially where poverty and debt bondage drive individuals to desperate measures. Technology has also contributed to the draw by making it easier for illicit actors to remain anonymous, increasing the security of certain illicit networks.
Narcotics wrapped in 10,000 brown and silver packages are on display in the patio of the Morelos military base in Tijuana (Jorge Duenes/Reuters).
Structural violence is often identified as an impetus for joining illicit networks. The manner of this violence, which includes poverty, debt bondage, and threats related to gender and race, creates interest in—and thus, the draw of—illicit networks that can provide access to money, job opportunities, and the hope of escape from structural violence.
As Philippe Bourgois noted in In Search of Respect: Selling Crack in El Barrio, drug dealing is desirable because of the ability to make large sums of money relatively quickly with little concomitant risk. One person in the book described how he would make the same amount of money in a 12-hour shift at McDonald’s as he could in 15 minutes of selling crack. However, the draw isn’t solely tied to illegal goods; it can also be related to legal goods that are used, acquired, or transported in illegal ways. For instance, crude oil smuggling is common practice in the Middle East and in Asia to avoid taxes and levies and to satiate demand.
Technology has also made anonymity more plausible, allowed for information sharing, and encouraged efficiency. For example, sex workers relate how the ability to share information about clients and STD test results has helped reduce violence in their industry. More information on this is in the technology section. Together, this has all played a major role in incentivizing the illicit over the licit, all of which tips the scale,even with the fear of arrest,in favor of the illicit.
Supply chain evaluation is proving a major weakness in the armor of illicit networks around the world. Until recently, many companies across the globe have been or are implicitly involved with illicit networks through their “licit” supply chains. Previously, if a good was produced illegally—in an illegal fashion, location, or with forced or coerced labor—there was a level of tacit approval that came from these organizations. However,advocates, reporters, and technology are increasingly empowering consumers with knowledge, and companies,conscious of their brands,are being held accountable. Legislatures are also creating tools that help drive the process. The California Transparency in Supply Chains Act of 2010, for instance, requires information about imported goods to be widely accessible and companies are obligated to clearly lay out their plans to combat trafficking within their supply chains. However, problems still remain. Faulty supply chains have helped created the illicit timber industry. The industry, which generates earnings of $10-$15 billion per year.Lumber producers forge certifications and commit label fraud to make illegal timber seem perfectly legitimate, and falsely label timber as more expensive types of trees.
Illegal loggers sit on their boat after loading wood they cut from mangrove forests,before they are detained;in Port Klang (Bazuki Muhammad/Reuters).
Recent investigative articles have highlighted these issues and brought attention to them. For instance, in a recent exposé on segments of the New Zealand fishing industry, it was discovered that Indonesian fishermen were made to work for little pay and in harsh conditions. Even worse, the fruits of their (coerced) labor ended up on the shelves and tables of American companies and consumers. Through such stories and the speed of information flow, the implicated companies took action at record speed illustrating the power of combining technology with narratives of lived experience.
Solid and reliable data,which is required to engage with governments and effectively combat illicit actors,is woefully lacking. Even the best databases, which are maintained by the United Nations Office on Drugs and Crime, have their problems; they depend on input from national government, can rely on guesswork, and are politicized. Indeed, states have been known to exaggerate their data to gain more funding, or alternatively, downplay their data in order to be presented as a success story. Even more troubling, there is no established methodology on what data to use and how to assess it. Having better data collection and sharing strategies will allow countries and international organizations to more properly respond to the threat of illicit networks.
Legal Questions: The relationship between the licit and illicit, and mafia states
By definition, transnational crime crosses borders, but efforts to combat it remain corralled within national borders. Existing international legal frameworks focus too little on combating corruption and do not effectively address the market that underpins transnational crime globally. The current regime suffers from critical normative gaps, and sensible strategies where norms exist. The UN Convention Against Transnational Crime is the central international framework governing crime, but it has not been implemented faithfully. The UN Office on Drugs and Crime and Interpol, the primary global institutions responsible for coordinating multilateral anticrime efforts, remain grossly underfunded. Bilateral programs like Plan Colombia and the Mérida Initiative channel significant funds toward the effort, but the aid is overwhelmingly military, and funding for more comprehensive solutions has consistently decreased year after year.
The central legal instrument for fighting transnational organized crime is the 2000 UN Convention on Transnational Organized Crime. But the treaty has no implementation mechanism and does not adequately account for the increasingly activity-based, horizontal structure of criminal syndicates or the growing nexus between organized crime and terrorism, corruption, conflict, public health, global finance, and modern technology. Furthermore, the international community has yet to agree to an operational definition of transnational crime. As a result, monitoring and enforcement of international agreements on crime and corruption is weak, many countries have not signed onto important treaties, and national legislation is unevenly implemented. The landmark United Nations Convention Against Corruption criminalizes a wide range of corrupt acts, including bribery, kickbacks, money laundering, embezzlement, and obstructing justice, but does not provide for monitoring state parties’ compliance with the convention, or enforcement of states that neglect their responsibilities under the treaty. On the bright side, nations and international institutions are slowly integrating public health, development, and community-based practices to decrease not only the supply but also the demand for illicit commodities.
Mutual legal assistance, capacity building, and anti–money laundering provisions are also critical to stopping organized crime. Pursuing suspects requires intelligence sharing, extradition, cross-border police cooperation, and capable domestic institutions. However, nations guard judicial and policing as sovereign authorities—undermining efforts to track crime across borders. The Financial Action Task Force, an initiative of the OECD, has adopted a successful policy of “naming and shaming” noncooperating jurisdictions, and has enlisted countries to craft legislative frameworks to combat money laundering. Overall, however, programs for judicial cooperation and anti–money laundering work lag far behind the criminals that hopscotch between sovereign jurisdictions. [For an in-depth discussion on the international cooperation to combat crime, see the Council on Foreign Relations’ Global Governance Monitor: Transnational Crime]
Further, the interplay of law and its lack blurs the boundary between the licit and illicit. States often engender illicit activities through the creation of new laws and regulations. Some states take advantage of laws designed to protect them, such as diplomatic immunity, to engage in illicit activities. To make actual improvements on the ground, states, the NGO community, and their citizens need to create virtual dynamics in which better legal frameworks combine with law enforcement and an empowered civil society to increase community resilience.
A Justice statue is pictured at the office of Masoud Shafie, lawyer for the three U.S. hikers charged with spying after they were arrested near Iran's border with Iraq, in Tehran (Morteza Nikoubazl/Reuters).
Complicating matters further, the increase in illicit activity is partly self-inflicted. With a stroke of a pen, policies that criminalize formerly legal activities can create,whole new areas of illicit activity. Harsh enforcement tactics can also reinforce the political and social capital of illicit actors, exacerbating the situation.
The most salient production of illegality through legal prohibitions is in the domain of human trafficking. The Trafficking in Persons (TIP) report, issued annually since 2001 by the U.S. State Department, emphasizes increasing law enforcement, tightening borders, and raising the number of raids and arrests against trafficking offenders. Indeed, through the Convention against Transnational Organized Crime, the UN’s efforts are focused on policing and punishing, instead of on the causes, the draw, and prevention. This hyper-focus on enforcement often has negative repercussions, perpetuates the criminalization of workers, and continues making the workers vulnerable. It is a widely accepted fact that when countries tighten borders and constrict immigration laws, the number of people migrating through illegal channels increases. For instance, the goal of the Philippines Household Reform Package of 2006 was to encourage better work conditions and prevent abuse. However, Filipinos continued to be in demand in the Middle East and they still wanted to go there to work, so they relied on unlicensed middlemen and illegal channels to avoid the Act’s provisions. By making it too challenging to emigrate legally, the Act encouraged de facto illicit network engagement. Similarly, in the case of prostitution, criminalizing demand,which was a strategy for reducing sexual slavery,pushed the industry underground. The legislation succeeded in stigmatizing the purchase of sex, but sex workers reported higher levels of violence and greater danger.
Another example of illegal trafficking made more hazardous by legal practice is in the drug and arms trade. States can encourage illicit activity both intentionally through covert support and unintentionally through ineffective and stringent laws that reshape the market. Interestingly, the smuggling of legitimate commodities, such as tobacco, pharmaceuticals, and alcohol, and even cars and computer chips, is also a form of illegality created by legality. Smugglers will go this route to evade taxes and circumvent embargoes to generate a greater profit.
A common struggle with those who are trafficked is that governments do not entirely understand how to help. Authorities will try to rescue and liberate those that are in illicit networks, especially those are who are trafficked, sometimes against their will. However, this rescue is often considered the end goal, and there is no consideration for the survivor’s future and the real impact on the survivor’s life and livelihood. For instance, even if a survivor returns to their home, it’s widely accepted that once a survivor is associated with the police, even if not by their choosing, that person will face ostracism or persecution for seemingly cooperating with the police. And,as with many efforts to combat crime, these rescue raids often suppress the criminal activity in one area, but the high demand encourages its rapid resurgence nearby without any significant disruption of the crime.
If the implementation of current legal practices not only fails to combat illicit networks, but also unintentionally fosters their endurance, proliferation, and reconfiguration, how should global policies respond to the prevalence of illicit economic globalization? Instead of relying on policies that seem abstracted from the lived experiences of workers, policymakers would be better served by taking lived experience into consideration, reforming labor laws and strengthening civil society.
States and the larger global community are taking steps to address these concerns, focusing on state-centric approaches that are enjoying varying degrees of success. It is important to consider multiple factors, including the origins of the problem, the sources of support, and the lived experiences of workers, when deciding policy. However, there remain state policies that do not recognize the need for a multi-pronged approach and instead target individual actors and micro-processes, like sex trafficking, while ignoring other aspects within illicit networks. Policies need to take a broader view on the structural violence and forms of systemic exclusion that fuel involvement in transnational criminal activities. A more holistic and human rights-oriented approach,rather than an excessive focus on criminalizing specific actors, which further pushes illicit networks into the margins where they are less likely to be regulated,is necessary.
States themselves can also be engaged in criminal enterprises, though their laws may not criminalize them, in order to remain in line with state interests. States also often work with corporations to create laws that might encourage rights-violating industries. This engenders a hybrid state, or corporation as the case may be, that is nimble, protected, and particularly hard to combat. It is one thing when countries produce laws with unintentional negative consequences, but what about states that make intentionally illicit laws for profit?
Former North Korean leader Kim Jong-il with senior military officers (KNS Korean News Agency/Reuters).
Illicit activity is not confined solely to any specific type of state; rogue, criminal state activity has been reported in rogue states, emerging democracies, and even advanced democracies. For instance, the North Korean government is complicit in the production and smuggling of everything from fake Viagra to opium and methamphetamines. The government has been reported to force its citizens to produce drugs and is widely found to be involved in other illicit industries, including counterfeit money, insurance fraud, and arms trafficking.
State involvement in transnational crime amplifies law enforcement challenges for several reasons. This practice affords criminal enterprises a blanket of protection and also protects state officials from prosecution in other countries. For instance, an increasing number of states have allegedly been taking advantage of diplomatic privileges and using their embassies as hubs of illicit trade.
There are few already existing multilateral legal tools that can be used to counter these challenges. Better processes for data collection and information sharing must be created in order to promote a clearer understanding of and ability to better combat the problems inherent in the grey zones of legality and illegality.
Technology has always been a boon to illicit networks, as many actors are early adopters of mechanisms that enable them to stay one step ahead of the state. Today, everything from cellular technology to drones to genetic engineering is fueling illicit networks. Technology cuts both ways and has been used to good effect by governments and non-governmental actors to map and disrupt various networks.
A foreign domestic worker walks into a shelter run by Caritas in Dora (Cynthia Karam/Reuters).
Technology can provide important services to antitrafficking efforts Technology could help raise awareness—among international officials, civil society, and vulnerable populations.Online platforms or networks could also help broadcast best practices around the globe and allow antitrafficking government and nongovernmental workers to communicate. International antitrafficking workers could also communicate about alternatives to rescue raids, or share insight on how to make them more sensitive to the needs of the victim.A final recommendation included engaging industry to disincentivize sale or purchase of a product that involved slavery in the supply chain. This would entail expanding investigate journalism, conducting interviews with slaves, and shaming multinational companies that facilitate forced labor.
Participants also noted that data regarding human trafficking is inadequate and that technology could improve current understandings of human trafficking. Innovative data mapping technology that linked migration flows to economic conditions and trafficking evidence might also provide a framework to understand the threat of trafficking and tailor better responses to it. It would be helpful to have current, up-to-the-moment data of rescues and processing centers, to allow outsiders to monitor whether victims are held for too long after “rescue.”
Participants noted that technology could provide a platform for human trafficking survivors to keep each other “alive, equipped, and networked.” Social media applications provide a useful starting point to connect survivors, but would not be universally appropriate since many victims would not have access to a smart phone. Computer platforms that have been used to promote public health in Africa, which employ cheap, small, solar-powered computers to share information across communities, could serve as a model. Ideally, these networks would offer psychological support and provide resources for victims to recover and rebuild their lives.
Technology has been beneficial to illicit networks in many ways beyond encouraging the creation of nefarious networks. Dealers of all sorts of illicit goods can now find customers and other dealers online and, through the use of cell phones, many face-to-face drug deals that might have turned violent in the past are now avoided. Throughout the world, but specifically in Asia, Eastern Europe, and South America, many migrants rely on unlicensed online recruiters. Sex workers advertise, connect, and screen clients online, all of which reduces violence, gives the workers protection from the police, and decreases the reliance on pimps. Additionally, the Internet enables sex workers to share information with one another about bad clients—‘bad Johns’—quickly. Furthermore, technology has been used to provide anonymous STD and HIV testing, with results disseminated to client bases and other sex workers, while making education and prevention resources readily available.
Mobile devices in particular have been beneficial to illicit networks of all stripes. For example, in California prisons, drug-traffickers often have cell phones smuggled into prison so that they can continue running their business. More technologically savvy smugglers sometimes wear GPS bracelets monitored by a control room, which is in contact with a network of spotters reporting the locations of police. With this information, the control room can map the scenario and give the smugglers directions to evade capture.
At the same time, technology is also being used to undermine illicit networks, and share information with vulnerable populations. The United Nations is developing a trafficking hotline available in many languages for the entire Mekong Delta. The BBC World Service recently launched ‘listening circles’ for trafficking-related radio programming, which has proven to be successful in informing and teaching vulnerable groups.
Interestingly, through new laws, the licit and the illicit often meet at a technologically-mediated border. This has happened in multiple industries. For instance, when marijuana became legal in California with the passage of Proposition 215 in 1996, dispensaries were permitted to distribute the marijuana, but were unable to keep up with the huge demand. Dispensaries became dependent on the illicit network of marijuana growers and traffickers to bolster their supply. This dependence, however, hinged on a web marketplace, which provided a venue for both buyers and sellers who previously operated informally in the illicit sphere to connect with the formal sphere.
Further, the agriculture and citrus industry in the United States is able to circumvent certain labor codes and rely on undocumented laborers. These workers first began coming to the U.S. over a century ago through guest worker programs, such as the bracero program, which offered limited rights and documentation status. These illicit trafficking networks now rely on technology to not only get across the border, but also to find out what farms need workers, and how many total workers are needed. The agriculture industry is dependent on migrant workers who use illicit networks that are structured and bolstered by technology to organize both worker supply and demand.
While developments in illicit networks, especially as they relate to technology, are still ongoing, the current relationship provides grounds for optimism. Though technology can make it easier for illicit networks to operate in the shadows, it also provides a range of powerful tools by which civil society can unmask and disrupt illicit activities. Furthermore, technology can empower those who suffer from structural or physical violence, and open up other avenues for support, communication and outreach.
While illicit networks across the globe are thriving, a review of the circumstances and situations show cause for hope. Technology, which can be used to keep shadow networks hidden, has also been used to understand, map and empower those suffering within these networks. However, a few issues need to be addressed going forward. By examining illicit networks holistically, including their origins, sources of support, interactions with other illicit and licit economies, and the lived experiences of impacted individuals, we can begin to understand and visualize the critical nodes and mechanisms of illicit systems. With this understanding, we can come up with creative options that can mitigate the violence and the costs associated with some of the world’s most dangerous illicit networks.